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Voice over Wi-Fi, which enterprise wireless vendors have seized on as this year’s hot sales pitch could be dead in the water, according to rivals.

Even though bandwidth on the office wireless LAN is free, the cost of Wi-Fi voice handsets would wipe out any savings over global system for mobile communications (GSM) phones if the operators offered internal GSM at sensible prices, it is claimed.

“There is no charge to use Wi-Fi, but the devices you need to make a true phone solution over it are expensive,” said Jeff Brown, chief executive of Radioframe Networks Inc. “They cost US$500 to $700 each, and you can have a GSM phone for next to nothing. It takes an awfully long time to pay the cost of the Wi-Fi handset back. There is nothing free in this world.”

Radioframe is — as you may have guessed — a vendor of the in-building GSM products which it is showing off at the 3GSM conference in France next week.

In-building solutions put a GSM base station in the office, managed by the mobile operator but behaving as an office public branch exchange (PBX). GSM phones can roam from the public network — expensive — to their private office GSM network — cheap — as easily as moving form one cell to another on the public network. This cuts at a stroke the expensive mobile calls that users make inside their own building, which is the basis for the voice on Wi-Fi pitch, and lets the mobile phone become the office extension.

The scheme has been tried by Ericsson Inc. and others before — and forms the basis for Ericsson’s continued optimism that mobile operators can see off the office Wi-Fi threat — but has flopped.

“Nokia Corp., Siemens AG and Ericsson tend to think about things from the outdoors in,” said Brown. Instead of adapting outdoor systems for the office, they should have a more lightweight approach, he added. The Radioframe system has multi-purpose access points that can hold up to seven radios, for any Wi-Fi flavour, GSM, 3G or other technologies, all of which are controlled by a central rack-mounted box.

The product could soon be in Europe, according to chief executive Jeff Brown. “We’ve completed GSM trials in Europe, and you should see this shortly coming out a number of operators.”

As Wi-Fi handsets come down in price, the dynamics may change, said Brown, but “today it makes more sense to send voice over in-building GSM”.